SWEET LEMONS - ILLUSORY QUALITY, SELF-DECEIVERS, ADVERTISING, AND PRICE

The author's study suggests that competition can lead to low-quality a dvertisers competing against and gaining market shares from lower-pric ed, high-quality non-advertisers. Evidence in support of this market o utcome comes from optometry, a service that has experienced advertisin g deregulation over the past two decades, The author discusses various explanations of this outcome, including the possibility that self-dec eiving consumers relying on ''illusory qualities'' believe they can ju dge product quality as measured by the firm, though they cannot, Thus, those consumers are ultimately satisfied with low-quality products at high prices-''sweet lemons.''